GSK confident of hitting top end of 2025 targets after strong second quarter

GSK reported a robust Q2 2025, with sales up 6% to £8 billion and core operating profit rising 12% to £2.6 billion, primarily driven by strong Specialty Medicines and Vaccines performance. Consequently, the company now expects to meet the top end of its 2025 guidance for turnover growth (3-5%) and core operating profit/EPS growth (6-8%). This positive outlook is further supported by significant pipeline progress, including five expected new product approvals this year, and ongoing shareholder returns via dividends and a £2 billion share buyback program.

Analysis

GSK PLC has delivered a robust second quarter, leading to an upward revision of its full-year 2025 guidance to the top end of its previously stated ranges. The company reported a 6% increase in constant-currency sales to £8 billion and a significant 12% rise in core operating profit to £2.6 billion, translating to core EPS growth of 15% to 46.5 pence. This outperformance is almost entirely attributable to its high-growth segments, with Specialty Medicines sales surging 15% to £3.3 billion and Vaccines growing 9% to £2.1 billion. Key therapeutic areas such as HIV, Respiratory, and Immunology all posted double-digit growth. While this strong performance was partially offset by a 6% decline in the General Medicines division, the overall outlook is bolstered by significant progress in the R&D pipeline. GSK anticipates five major product approvals in 2025, has already received three, and points to 14 potential assets that could each generate over £2 billion in peak annual sales. This organic growth narrative is complemented by a firm commitment to shareholder returns, demonstrated by a 16p quarterly dividend and £822 million spent on share buybacks in the first half as part of a £2 billion program.

Key Decisions for Investors

• Given the strong Q2 earnings beat and upwardly revised full-year guidance, the report supports a constructive view on the stock, with momentum underpinned by the high-growth Specialty Medicines and Vaccines divisions.
• Investors should closely monitor key near-term pipeline catalysts, particularly the upcoming US regulatory decisions for the oncology drug Blenrep and asthma treatment depemokimab, which could materially impact future revenue forecasts.
• It is important to assess whether the high-growth segments can continue to outpace the structural 6% decline in the General Medicines division to sustain long-term valuation expansion.
• The company's commitment to shareholder returns, via a consistent dividend projected at 64p for the year and a substantial £2 billion share buyback program, provides a solid component of the total return thesis for investors.